Market Update

Australian Resources Conference Zurich - General - Perseus - Graphex

Good afternoon

Invitation to our yearly Australian Resources Conference in Zurich - please use this link to have a look at attendees, and a form to attend: https://www.schroeder-equities.com/conference/

Fantastic snow here in Munich, and even more in the Northern Alps!

Equities currently recovering most of their early losses, metals slightly up - again. Nickel stocks down quite heavily today - now at levels last seen at the end of 2013 - and less in terms of weeks of consumption…

Uncertainty in the DR Congo - elections have been a surprise, but a lot of noise about rigged elections…

Many of our beaten up names are finding price-support these days - I wonder, whether we could have a bit of a rally , once and if Mr.Nero ends the government shut-down, and trade negotiations are finding some solutions? As you know, January is generally a month of good moeny inflow as well.

BHP very weak today - but they went ex 1.02 US$ special div - taken that into account, they were actually up!

Brent Oil continuing to trade above 61 US$….what a difference two weeks make! Very hard to react to those moves…perhaps time to buy some BP at 6.5% yield?

Or perhaps some Norilsk even, as one of my clients suggests? PE of 8.5 and 10% yield for 2019 - producing a lot of nickel, copper and palladium?

Or some Middle Island?? They have a resource of 500.000 oz and a resource target double that - but very limited financing to drill that that out. A small, 1.35 mill$ rights issue is just about to be finished, and at a market cap of 5 mill$ even after today´s rise, this is the stock to make 10x your money, if gold continues it´s run. Until recently, I did not plan to take up my rights - but gold is feeling increasingly good, and volatilty of markets will undoubtedly continue, supporting further gold inflows into Gold ETF´s. Momentum players will have their attention on gold now, and a move through 1300 could quickly see more gains. When gold traded at 1350 last, back in mid 2016, the GDXJ was trading more than 60% higher than today! I fear, though, that the real bargains are not in the larger stocks like my old favourite Evolution, et al…

Perseus - time to revisite? 130 mill options are expiring at 0,44 A$ in April - resulting from their takeover o gain the Yaoure project 2 years or so ago - that´s limiting short term performance, as the stock is trading just below the exercise price. But as a high-cost producer, and holding a reserve of more than 3 mill oz, the stock is cheap with a market cap of only 420 mill A$ = about 100 US$/oz reserve. IF they get the options exercised, I think the chances of financing Yaoure without any fresh equity are rising again….and looking at Macquarie-numbers, operational EBITDA should approach 190 mill$ on an annualized basis, using todays gold price and exchange rate. Will be interesting to see their Quarterly Report - the last one was pretty good. Today, they announced the engineering contract for Yaoure to Lycopodium - they intend to book the last profit from it in the first half of calendar 2012, giving PRU some time to deliver the cash flow to pay for the new mine, which should improve the asset quality of PRU quite substantially. So - not a raging buy, but a good stock to accumulate in a rising gold price enviroment!

Graphex Mining - the Tanzania Minister of Mines got the sack and has been replaced by the previous Deputy. I think this might be good news - the various issues plaguing mining companies in the country did not make all that much progress, except for some positive noise, under the old Minister…perhaps the new one is showing some more enthusiasm to get bitterly needed investment in Tanzania going again?! I guess we will get a better feel for this over the next month or so.

have a nice evening

Schröder Equities GmbH

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eingetragen im HR München, HRB 166985

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Australian Resources Conference Zurich 2019 - General

Good afternoon

Please see this link to find an invitation to this years Australian Resources Conference in Zurich, incl all participants: https://www.schroeder-equities.com/conference/ . Please also pass it on to interested friends and colleagues!

The press is consistently reporting about fundmanagers and individuals, who have/are/will reducing/ing their equity exposure - yet markets are off to a strong start! Looks like the trade talks might be getting somewhere…and perhaps, many cautious hands have reduced already? Trees will not grow into the sky this year, but especially small miners should see some relief from depressed levels.

The Worldbank today published their forecast for GDP-growth of 2.9% this year. I would be very happy, if we get there!

Metals as well as equities are continuing with their cautious recovery today…especially copper looking strong. Grasberg announced, that copper production will halve this year amid a move to underground mining. I do not believe, that such a big drop has been forecast…but not sure about it.

Palladium continuing it´s race - diesel needs more platinum, bezin-driven cars need palladium…Norilsk is expecting deficits in Palladium producttion for years to come. The highest combinded price for palladium/platinum I could find has been 2390 US$ ( 1 oz + 1 oz ) in mid 2014 - the loweset around 1700 in 2015. Today´s combined price is a relatively healthy 2164 US$ Pall+Plat-oz. As I said yesterday - I can se ethe day coming, when the market start talking about Panoramics sizeable deposits in Australia and Canada.

Oil is continuing it´s massive run - well, following a much more massive fall! After falling from 86$ to 50$ ( for Brent ) on Christmas Eve, it has recovered by a staggering 20% since then, hitting 60$ today. Machines and programs at work, I guess, supported by more evidence, that Saudi wants to ensure reasonable prices

In Australia, many investors are still on holidays this week..we will see a steady increase of activity over teh next 2 weeks, when everybody should be back on board.

Nevertheless, the market in general, but also in small stocks looks better supported - some bargain hunting is obviously around!

I fear there is not much more to report from Australia today!

have a nice evening

Resources Conference 2019 Invitation - Strike Energy - Metro Mining - Pilbara Minerals - Resolute - Caravel - Paringa

Good afternoon

so - 2019 has started, and at least it started better, than 2018 ended with a dismal December!

One thing is for sure - 2019 will not be better than 2018, when it comes to developing , small cap resource companies - but that is very cynical, as it cannot get much worse!

But we are looking forward - and to enable you help you making sensible investment decisions, we will have our annual Australian Resources Conference - No 18 , if I count correctly! Amazing! Time is moving like hell ! Please dind the invitation attached, using this link…and please pass on to ther interested investors.

https://www.schroeder-equities.com/conference/

In my opinion, the terrible performance in December was very much an expression of multiple, political uncertainties. The incredible volatility of Trump´s opinion was starting to dent investor confidence quite severely, and upheavel with regards to BREXIt, the French situation, German economic deteriorationand especially the trade war weighed heavily on markets. And gold, for a change , did profit from it!

More recently, though, more dovish FED-comments helped markets, and expectations are now very much for a more muted increase of interest rates in the States - if they increase at all.

Over the last few days, we have had several important, economic numbers : Weak PMI´s around the world, very disappointing factory orders and industrial production in Germany were countered by a very strong jobs report in the US.

But overall, it is very clear, that the world economy is under pressure - the next round of forecasts will incorporate reduced growth expectations!

More promising is the latest round of US-Chinese negotiations. A breakthrough might be needed - otherwise we will move in the wrong direction very quickly again!

A$ gold hit a new all time high of 1840 A$/oz recently, and is currently trading at 1795. Nickel is looking very exciting on the charts - it has boken the 8 month downward channel to the topside and I would not be surprised to see it moving to something like 14.000 US$t - but that would clearly need much more progress in trade talks.

Strike Energy - long standing investor in STX, Tim Goyder, has resigned from the board and has been replaced by Stephen Bizzell, who is representing UIL, which was recently taken over by STX. Bizzell is a very highly regarded oil & gas executive, having been an ED of Arrow Energy ( taken over for 3.5 bill A$ ) and a founder of Bow Energy ( taken over for 550 mill A$ ). Tim has been a good director - but he is much more of a mining guy, and the new director should be positive for Strike. Tim expressed his ongoing commitment to Strike as a significant shareholder.

Metro Mining - MMI announced to ahve erached guidance, with the production of just over 2 millt of bauxite in the first year of operation - despite a 6day , cyclone-related shutdown in december. Guidance for 2019 is 3.5 millt. The company will change to owner mining, once the new season is starting in April. As you might remember, the operation will always clsoe down for the first Quarter, due to very wet wheather in the very North of Australia ( 550 mm of rain in the first 3 month on average ). Owner mining should reduce costs further, as are freight rates, which have been weaker recently - beside the further ramp-up of production. In the emdium term, I am hoping for a margin of 14-15 A$ t in the medium term, resulting in operational cash flow of approx 90 Mill A$ at the expanded mine by 2021/2022, and I guess 13$ margin in 2019 at a production rate of 3.5 mill$ = 45 mill$ cash flow. The market cap is only 214 mill A$. The main risk for MMI is wheather, which always has the risk to shorten operating time from 9 month to 8 month, and marketing of the bauxite. having said this the company had no problem in selling production of 2018 and 2019, and is establishing some excellent relationships with Chinese alumina-smelters. The only problem: The company is now entering the quiet period with no production.

Pilbara - announced financing of Stage II of their lnew lithium mine, with offtake and equity/debt investments by Ganfeng and Great Wall. The company will also increase deliveries from Stage II to the planned hydroxide operation in Korea, in JV with Posco. The agreement shows, that there is ongoing appetite by large users of lithium to enter into longer term off-take agreements with lithium miners, despite the recent, bearish tone in markets. Stage I is still ramping up, making good progress, and achieved record production in December. PLS and MIN are both cheap stocks, and both are moving into the top league of lithium producers from nowhere 2 years ago! If you believe in electrical cars, and I do, both a cheap!!

Resolute - not that surprising, Resolute indicated interest to divest their Australian operation. Some analysts believe, that they could be worth 350 mill A$ - I think that´s optimistic. As reported in December, the new block cave mine at Syama is making good progress, but risks still remain until further progress has been made, and until the fully automated underground mining operation has been achieved. RSG have 62 mill A$ in net debt now - again, about in line with expectations. I think it´s time to accumulate RSG slowly, but surely.

Caravel Minerals - this copper-minnow with a market cap of 10 mill A$ and a large, undeveloped and low-grade copper resource in Western Australia, announced some very positive drilling results the otehr day. The company was testing a new exploration concept to establish an early stage, higher grade initial mining reserve. The first drill holes have been very positive, with 34m at 0,55g and 58m with 0,54g/t vs a resource of 840 millt at 0,34g/t. The results are very promising! There will be a time, when any new copper mine is desepereatly needed, I think - and financing of a smaller, higher grade mine in a very good location would be a lot easier. A pre -feasibility from a few years ago was calling for 15millt annual treatment at 0,26% copper - pre-production capital of 440 mill A$. If those parameter could be changed to say 7 mt p.a. at 0,45% copper for production of approx 30.000t p.a., the project would have a very good chance!

Alliance Resources Partners - this is a good indicator for demand of coal stocks and coal prices in the Illinois Basin, where Paringa should shortly announce first coal production. The stock move by more than 10% in the last few trading sessions ( back to late-Nov levels ), while Paringa is making new lows. Good news of first production should come out definitely this month, which should be greated by the market. PNL are trading at 2x EBITDA currently, using spot of about 44 US$. In the shorter term, earnings will be lower, because of debt-related forward sales at lower prices. But by 2023, the second mine will be in production, making the stock even cheaper. A good time to soak up some stock…

Have a nice evening

Schröder Equities GmbH

Seitzstr.7a

80538 München

Tel. +49-89-4613440-0

Fax +49-89-4613440-10

email: wschroeder@schroeder-equities.com

website: www.schroeder-equities.com

eingetragen im HR München, HRB 166985

Geschäftsführer: Wilhelm Schröder

General - Genex

Good afternoon

when the FED did make it´s move Wednesday, all hopes were destroyed quickly and markets tumbled…NÀSDAQ from about +1% to -2.17%….and Europe got the expected hammering yesterday., down by about 1.5% . Last night in N.Y. and today in Europe, the selling continued.

The GDX got a hammering on Wednesday - down 5.4% on heavy turnover - the GDXJ even worse…But gold , following some initial weakness - has been fighting back and feels pretty good! A bulltrap quickly became a bear-trap. The A$ gold price at 1775, and oil very weak - that´s goldilocks for the gold miners! Base metals are continuing, what is effectively a sideway-movement.

Mattis also gone…not that I liked the guy - but he is certainly a very respectable man - and he was one of the very few halfway sensible guys around Trump. Very bad news!

Genex - so, nearly done! The company yesterday announced a Term Sheet with Energyaustralia, the third largest energy retailer in Australia, with a BBB+ rating. EA will get 50% of a JV, which will own and operate the Kidston hydro project. In return for this, EA will give the JV a guaranteed offtake agreement for at leats 25 years, probably 30 years. They will also invest a substantial amount of equity into the JV. leaving GNX with only a very small amount of equity to bring to the table - probably around 20 mill A$. Following the investment of EA, GNX is planned to have a IRR of 20% from the project. Over 30 years, that´s not bad! Normally, everybody in Infrastructure-Investment is happy with 10% IRR these days!

The announcement obviously has been written by the lawyers - in fact, negotiations are very far advanced, and the transaction is all about done…The main thing missing is the agreement for the power transmission - and that is very far advanced. Also, ARENA ( another government body ) will add to the financing. But then, in the current market, nothing is done until it´s done! The waiting game for us is not over - but we are clearly getting there.

In Australia, hardly anybody is left in the office…Christmas time is also the time of the big school holiday, and just about everyone has closed the book for the year. Normally, the stock should have put on at least another 5ct or so…But for us, this leaves a bit of time to buy more stock at prices below 30ct. Analyst, in quick updates today, valued the stock between 52-and 80ct/share - somewhere in the middle is probably realistic.

I have done a very simplicistic exercise:

20% IRR ( les say 2% gone for headoffice etc )= 18% IRR, on a share price of 26,5ct, brings you to a value of 1,39 A$/share in 10 years time.

If someone would take it over today, at 50ct, a 10% IRR would bring the valuation in 10 years time to: one guess? 1.39 A$/share!

As this project is not done as yet ( even though the risk is very much reduced now, and the technology has been used often around the world ), a higher IRR of 15% would have you arrive at a share price of about 34ct share as at today. That´s where this thing should at least trade at today…and share price would apreciate 15% p.a., and more, with consistent risk reduction to a terminal IRR of say 10% upon production in late 2022.

We will have the company presenting on our conference on 22nd of Feb - by that time, we should have more news and clarity.

Nothing is a no-brainer - but GNX gets close to it. I declare- once again - my substantial interest.

As I said before - this correction is pretty fast and furious and unnerving…and we all hope, that it is just a correction. But valuations of equity markets are generally pretty ok now - and I still expect the FED to slow down dramatically in the new year. Potentially, that should put a floor under markets - as well as a floor under the Euro against US$. I maintain my view: If Trump becomes halfway sensible about the trade issue, 2019 might actually not be as bad as we tend to think today! Well - none of us really knows - but let´s not get too negativ!

In any case - enjoy a great Christmas, and have a good start to 2019! I will be back on the 6th of January…

Schröder Equities GmbH

Seitzstr.7a

80538 München

Tel. +49-89-4613440-0

Fax +49-89-4613440-10

email: wschroeder@schroeder-equities.com

website: www.schroeder-equities.com

eingetragen im HR München, HRB 166985

Geschäftsführer: Wilhelm Schröder

Australian Resources Conference 2019 - Kidman - Bellevue

Good afternoon

what a year! Definitely one to forget…

On the more positive side: The Australian BIG 5 gold miners ex Newcrest are trading at all time highs, or close to it! And we have had a few other ones, like Aurelia or Silver Lake, which came back from the ashes and had decent runs. But the excitement at the developer-end is still very limited, and seems confined to pure Australian plays. This is perhaps not that surprising - 2018 has been a bad year ( again ) for country risk, and Australia is obviously one of the lowest country-risks available!

But perhaps inspriring for the rest of the market: Voices are getting louder, which see the base metals potentially having an excellent 2019, given low stock piles, and generally, undersuplly in 2019 ( as in 2018! ). But all of this assumes, that we see at least reasonable GDP growth for the world in 2019, even though I think everybody would be very happy just with a 3 in front.

Mr.Trump is not all about charity! Surprise surprise…read the comments of the prosecutor, and you know, what he´s like:

AUSTRALIAN RESOURCES CONFERENCE in ZURICH 22.February 2019

The group of presenting companies has been fixed now:

Antipa Minerals - Breaker Resources - Cassini Resources - Evolution Mining - Genex Power - Graphex Mining - Evolution Mining - Liontown Resources - Metro Mining - Panoramic Resources - Technology Metals

The only uncertain appearance is Bellevue Gold, due to other commitments - and we might include Silver Lake instead.

I think the above list is a great mix of large & small, of base metals, gold, and battery metals, exploration & production. And we are especially proud, that Evolution Mining´s Jake Klein will present again - probably Australia´s best gold mining comapny

We will send out invitations some time in January. As always, the conference will be free for investors , and will be held in the Hotel Baur au Lac in Zurich.

Some new names, some old friends! If you miss a company from last year, or the year before, this must not necessarely have a fundamental reason - it might just be, that the relevant company will not be able to make the time table, or has nothing new to report. But certainly, it might have a fundamental reasoning behind it, as we only invite companies, which have a great future ahead - well, in our very subjective opinion!

Bellevue Gold - the stock came under some pressure lately, following a really strong performance throughout the year. The company did a highly succesfull placement at 34ct 8 weeks ago, and is now coming back to this level. Australian institutions hardly own a share. The company has established a resource of 1.040.000 oz at 12,3g gold/t, drilled out within only 11 month. Some recent drilling indicates a resource increase, and 4 drill rigs are currrently at work to have a new resoutce estimate out in the first Quarter, probably February. I think the Kirkland Gold resource estimate in late January will get the market very excited, and Bellevue is another very high grade resource , albeit in Western Australia near Leinster. I imagine, that the BIG 5 Australian´s are all watching this one - it´s not that hard to see a 150.000 oz producer at very low costs ( given the grade, perhaps at 600 US$ AISC ), with very small development capital needed. I have had them on my watchlist since my recent Australia trip, and while I have not bought any, they are approaching buying territory fast for me. Note: There are 447 mill shares outstanding, but another 115 mill ( mainly ) cheap options incl performance shares - So fully diluted, the company has a market cap of about 205 mill A$, with about 26 Mill A$ in cash for a fully diluted EV of roughly 180 mill A$. Not dirt cheap - but with strong potential to find more. Within one of the large mid-tier miners, this asset would be valued higher - and all of them would at least keep their asset quality, if they bought it!

Kidman Resources - tehy are developing their Australian lithium hard rock project with SQM, the Chilean producer ( to be in production in 2012 ). Today they announced an offtake agreement with LG Chem, for 12.000t of lithium hydroxide p.a. for 10 years - about 50% of KDR´s share. Tesla and somebody else had already been signed up for offtakes earlier. The company reports of massive interest in the offtake, from 13 or so different companies, and commented, that they probably could have done 3x this size. They also reported of very strong interest from many banks, to finance the project to a significant degree with debt. The latter is new - banks so far have been very cautious in this space, lacking expertise. And the former is detrimental to many analysts believe, that prices for lithium products will stay low/ becoming lower for some time. I have no idea, why Pilbara has been relatively weak recently - I think worth a very good look - and also Mineral Resources at current levels. Market continues to be excited about their valuation following the Albemarle transaction, but got also surprised about higher than expected capex for the JV-project.

Have a good evening! Gold looks good in US$ terms ( 1300 next target ) and in A$ terms - the old high of 1800 A$/oz looks to be tested soon? GDX has broken out - GDXJ to do so soon?

Schröder Equities GmbH

Seitzstr.7a

80538 München

Tel. +49-89-4613440-0

Fax +49-89-4613440-10

email: wschroeder@schroeder-equities.com

website: www.schroeder-equities.com

eingetragen im HR München, HRB 166985

Geschäftsführer: Wilhelm Schröder